FDI attraction the correct policy for national development: PM Phuc

NDO – Opening doors to attract foreign direct investment (FDI) is the correct policy, contributing to the successful implementation of important socio-economic development goals in the past 30 years, thus making the FDI sector an indispensable part of the Vietnamese economy.

The statement was made by Prime Minister Nguyen Xuan Phuc during a conference reviewing three decades of attracting FDI, held in Hanoi, on October 4.

The government leader expressed his sincere gratitude to foreign investors who have trusted and selected Vietnam to make investments, as well as accompanying the nation in overcoming difficulties and making practical contributions to its development.

However, it is necessary to look directly at the shortcomings in attracting FDI in Vietnam, PM Phuc stated, pointing to the lack of multinational corporations making investment in Vietnam in the fields of high technology, while there are limited links between the FDI and domestic sectors, technology transfer has yet to meet the requirements, and the value added is not as high as expectations. In addition, several FDI projects consume a lot of energy and resources, not to mention the pollution caused to the environment.

In order to improve the quality of FDI flows in the future, the PM asked the ministries, sectors and local authorities concerned to focus on what investors always need, that is to maintain socio- macroeconomic stability and improve the legal framework related to investment, including the facilitation of preferential investment policies for foreign investors, with the aim of improving the capacity of the economy and building a self-governing economy.

It is also necessary to encourage and support domestic enterprises to establish joint ventures, purchase shares and contribute capital with FDI enterprises in projects using high technologies, new technologies or support industries, while perfecting the preferential policies and investment incentives on the principle of linking the inspection and supervision mechanisms to ensure that FDI enterprises strictly comply with their investment commitments and are in line with the criteria and conditions for preferential treatment.

The PM also asked the Ministry of Planning and Investment to finalise a 30-year review report on FDI attraction and submit it to the Government and the Politburo for promulgation of a new Resolution on the orientations for perfecting the institutions and policies to improve the quality and efficiency of FDI cooperation by 2030. On that basis, the Government will promulgate a specific action plan to better implement FDI attraction, PM Phuc added.

At the conference, representatives from the top localities in FDI attraction, such as Hanoi and Binh Duong, presented their experiences and proposed measures to improve the quality and efficiency of FDI attraction in the new context. Foreign investors exchanged ideas to identify challenges and investment opportunities in Vietnam, while expressing their confidence in the country’s investment environment and reaffirming their commitment to continue investing in Vietnam.

As of August 2018, there were over 26,500 FDI projects in Vietnam with a total registered capital of more than US$ 34 billion. The FDI sector contributes nearly 20% of the GDP and accounts for 23.7% of the total social investment.

Meanwhile, 58% of the total FDI is concentrated in the processing and manufacturing sector, creating more than 50% of the country's industrial production value. Export turnover of the FDI sector accounts for an increasing share of the country's total exports, reaching 72.6% in 2017 and 71.4% in the first nine months of 2018.

The FDI sector has contributed a steadily increasing proportion of the budget revenue over the years, reaching over US$8 billion in 2017, and accounting for 17.1% of the total State budget collection. So far, the FDI sector has created jobs for nearly 4 million direct labourers and roughly 5 million indirect labourers.